Here comes the flood: Sydney home sellers swamp auction market

Sydney will set yet another record for an early spring Saturday this weekend as extraordinary listing numbers continue to swamp the home auction market.

Sydney has listed 1643 Saturday auctions to begin the spring selling season over the past fortnight. This is 551 homes more, or an increase of 50.5 per cent, than the 1092 auctioned over the first two weekends of September last year.

This Saturday, 826 homes are scheduled to go under the hammer – up on last weekend’s previous September record of 817.

This is well ahead of the 517 auctioned over the same weekend last year. 

Monthly records will continue to be broken over the remainder of September with the first spring Super Saturday of auctions on September 26.

The familiar pattern of leading suburban auction regions will continue this weekend with the inner west again set to host the highest number of listings with 127.  

Next highest again will be the upper north shore with 116 followed by the south 104, the city and east 96, the south west 75, the west 73, the lower north 72, Canterbury Bankstown 50, the north west 49, the northern beaches 45, the central coast 18 and the Blue Mountains has just one auction scheduled this weekend.

The leading suburb for auctions this weekend is Epping with 10 followed by Baulkham Hills and Liverpool each with nine and a number of suburbs have eight auctions scheduled including Strathfield, St Ives, Balmain and Bexley.

No surprise that unprecedented auction numbers are influencing clearance rates with a weaker but still relatively strong sellers’ market emerging in Sydney over recent months.

The Sydney weekend home auction market recorded another moderated result on the official opening to the spring selling season last Saturday. 

Although Saturday’s 75.1 per cent auction clearance rate was marginally ahead of the year-low 73.7 per cent recorded the previous weekend, it was nonetheless the second lowest rate recorded for the year so far.

The weekend auction market in Sydney clearly weakened over winter with clearance rates falling well below those recorded in autumn and lower than those recorded at the same time last year. Sydney has now recorded seven consecutive weekends below 80 per cent following 22 consecutive weekends (excluding holidays) above 80 per cent.

The Sydney market was on the rise a year ago, with clearance rates consistently climbing above 80 per cent. The rate reported for the same weekend last year was 82.7 per cent – nearly 10 per cent higher than that recorded last Saturday.

Higher priced regions have reported the highest clearances rate over recent weekends which reflect typically higher levels from buyers and sellers in this group over the early spring market.

Lower-priced areas to the west and south west have however been clear underperformers over the past month with clearance rates falling sharply. This may reflect recent tightening of bank lending policies for investors dampening demand from this group that typically target lower priced properties with higher yields.

With higher priced properties active in the spring market, the Sydney home auction price trend continues to increase with last weekend’s result of $1,121,375 up from the $1,108,875 recorded the previous weekend and 18.7 per cent above the $944,750 trend recorded over the same weekend last year.

Latest ABS data reporting near flat GDP growth over the June quarter reinforces rising pessimism over the future direction of the Australian economy and a downward bias for interest rates. The recent sharp fall in the Australian dollar is a positive however for Australia’s export-orientated industries.

Home building activity continues to surge in Sydney with 1655 houses approved for construction over July – the highest monthly total recorded in the ABS series for the city. July was also another strong month for unit approvals in Sydney with 3511 recorded – the third highest on record.

Sydney’s home building boom continues with 28,210 approvals reported over the first seven months of this year – an increase of 7438 or 35.8 per cent over the 20,772 homes approved for building over the same period last year.

The remarkable increase in home building in Sydney is a positive for job creation and the performance of the local economy.

Dr Andrew Wilson is Domain Group Senior Economist Twitter @DocAndrewWilson

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